Where else is it going to come out? the top of the controller is taken up by the two slots for VMUs/memory/rumble pack (which sticks out a little). That's why they have the little pinchy grove at the top, so that the cord folds and it still can come out the top. I never had an issue with the cord.
Well, yeah, I know "why" they did it...But my point was geared more towards the fact that they should have made the rumble + vmu the bottom loading pair and leave the cord up top.
The whole dysfunctional issue with the cord is that by having to use that pinch and loop it from beneath, you're essentially shortening the length of your cord by 6". That frustrated a lot of people, including me, in the days before consoles with wireless controllers included.